Venture Capital at an all time high

Overview:

2017 saw the highest VC investment activity since the dot-com era, creating confidence in the startup landscape although companies are remaining private longer forcing VC's to inject capital into companies that would have otherwise gone public.  Last year's investment story includes notable deals like Lyft's two rounds totalling over $2.5 billion, WeWork's $3 billion raise from SoftBank and $450 million raised by Space Exploration Technologies Group.  

A look at the numbers:

VC's deployed $84 billion across 8,000 companies

VC's raised $32 billion across 209  funds

2017 only saw 5 mega-funds, compared to 9 in 2016

Summary:

While the number of deals has declined for the third straight year, VCs are looking for large deal opportunities that may represent exit opportunities for valuations that resemble the unicorn craze of 2014 & 2015.  Due to the lack of IPO events for startups in the current market, we saw decreased deal volume that places emphasis on bigger bets on a smaller number of companies.  Because of the likelihood that 2018 will see stronger IPO activity in combination with VC optimism, this year should be another year of record-setting investment activity.  The negative outcome of the market conditions have created a  more difficult seed and angel investment landscape.  Angel and seed deals dropped to 47% of all deals, compared to above 50% in the previous years.

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michael tsokur